And Now, the Catfood Party (2)

Like most establishment pundits, Thomas Friedman (andapparently most of the rest of the nation) came awayfrom the awful reality show called the RepublicanPresidential debates quite discouraged. While someprominent conservatives in the party are openly castingabout for a way to inject some sanity into the race andperhaps another candidate the New York Times columnistis talking up another party. "Eventually the `circularfiring squad' that is the Republican primary will beover and the last man standing will be the party'snominee for president," wrote the scribe of flat earthfame. "If that candidate is Rick Santorum, I thinkthere is a good chance a Third Party will try to fillthe space between the really `severely conservative'Santorum (or even Mitt Romney) and the left-of-centerBarack Obama." (Notice how he puts the unnamed party incapital letters, probably to set it off from thealready existing alternatives, like the Green Party, orSocialist Party.)

Friedman says he hasn't made up his mind whether hewould support an alternative candidacy but he has anominee to head its ticket. It's former U.S.comptroller general David Walker, a former seniorexecutive at PWC auditing firm and currently the chiefexecutive of something called the "Comeback AmericaInitiative." Walker's background and activities areinteresting and instructive, but of most significanceis what it is that he proposes to do to get "America'sfiscal house in order."

What's the big problem? The deficit, which "is primarily a spending problem" but "not only a spending problem."

One dollar in new revenue is needed for every $3 in spending cuts, excluding interest, says Walker - andthat should be accomplished through tax "reform" thatmakes our system "simpler, fairer and more competitive,while generating more revenue," Friedman quotes himapprovingly. "The Republicans are simply in denialabout this," says Walker.

Meanwhile, the Democrats "are still in denial about theneed to renegotiate our social insurance contract,"says Walker. He complains the President Obama "is nottalking about the fundamental reforms in Medicare andMedicaid that we need, and he is not ready to touchSocial Security."

In 2008, Walker wrote, "We need to re-impose toughbudget controls, constrain federal spending, decidewhich Bush tax cuts will stay, and engage incomprehensive reform of our entitlement, healthcare andtax systems. A bipartisan commission that would makerecommendations for an up-or-down vote by Congresswould be a positive step to making this a reality."

When the President was convinced in 2010 to set up the"bipartisan" National Commission on FiscalResponsibility and Reform - otherwise known of as the"Simpson Bowles" panel - the chief potential targetsfor spending cuts were Social Security, Medicare andMedicaid, the three principal economic securityprograms for seniors, people with disabilities and thevery poor. As the intent became clear, Senior anddisability activists around the country took toreferring to it as the "Catfood Commission," anallusion to the really existing seniors who haveresorted to eating pet food when their meager incomeshave run out.

First we had the catfood commission; now we have thecatfood party.

Some on the Left have taken to saying the U.S. hasbecome a "Third World" country. Sound catchy, but it'sway off the mark. If the country were reallyimpoverished, there would be some legitimacy to theidea that we really couldn't afford to properly meetthe needs the elderly, people with disabilities and thepoor. Yet, ours remains the richest, most powerfulnation on the planet, one that spends trillions ofdollars on foreign wars and maintains an upper crustthat consumes voratiously and ostentatiously. It's all amatter of equities and priorities.

Walker correctly notes that "We are not Greece, wherethe government grew too big, promised too much andwaited too long to restructure," adding "but we'remaking many of the same mistakes."

And we're getting the same advice from the same people.

The creation of the deficit commission coincided with acall by the International Monetary Fund (IMF) to reducethe U.S. federal budget by reforming Social Security.

"Since benefits can be fully funded for almost threedecades by the bonds held in the trust fund, the IMF iseffectively suggesting that the government default onthese bonds and not give workers the benefits that theyalready paid for with their Social Security taxes,"economist Dean Baker wrote at the time.

"It is a bit striking to see a recommendation like thisfrom the IMF for two reasons," wrote Baker of theCenter for Economic and Policy Research, July 9, 2010."First, the only reason that the country is facing sucha large deficit and debt is that economists at the IMFand elsewhere were not able to see the $8 trillionhousing bubble. It was the collapse of this housingbubble that wrecked the economy and caused the deficitto skyrocket. In other words, the IMF wants U.S.retirees to take a hit because the economists who workat the IMF and other such places do not know how to dotheir jobs."

"The other reason why this suggestion from the IMF isstriking is that the economists there can often retireewith huge pensions in their early 50s. It not uncommonfor a former IMF staffer to be able to be getting asix-figure pension when they are just 51 or 52,"continued Baker. "So we have the people who wreckeconomies drawing $100,000 pensions at age 51,complaining about the $14,000 a year in Social Securitybenefits that real workers begin drawing in theirsixties. Excuse me for not taking this one seriously."

But it was taken seriously, very seriously.

For two years now, the litany has become all toofamiliar. Major media editorialists and economicwriters constantly refer to Social Security andMedicare as "the two long term drivers of the budgetdeficit," as the Financial Times did last week.Actually, Social Security has never contributed to thebudget shortfall and the problem with Medicare is thecontinuing skyrocketing cost of medical care.

Heavily funded Political Action Committees are not theonly way representatives of the very wealthy throwtheir weight around in the political arena. There isPeter G. Peterson, former U.S. Secretary of Commerceand co-founder of the Blackstone Group - an American-based financial-services company, who set up the groupbearing his name. Less than three months after the IMFcall for action on Social Security, Walker took leaveas president and CEO of the Peter G. PetersonFoundation and assumed leadership of the new heavilyendowed Comeback America as a vehicle "to engageAmericans and assist key policymakers in makinggovernment more future-focused, results-oriented,responsive, efficient, equitable and sustainable."

More from carl bloice And Now, the Catfood PartyThePeterson group was launched with a grant of $1 billion.Its board of directors includes:

J. Michael Cook (chair), Independent Director, former Managing Partner and CEO of Deloitte Worldwide, and former chair of the American Institute of CPAs. (AICPA); Ernest A. Almonte, CEO of Almonte Group LLC, former chair of the AICPA, and former auditor general of Rhode Island; Norman R. Augustine, independent director, and former chair and CEO of Lockheed Martin Corporation; Michael J. Critelli, independent director, and former Chairman and CEO of Pitney Bowes; Harold E. Ford, Jr.; executive vice chair of Bank of America/Merrill Lynch, and Former Congressmember (D/TN); Mel R. Martinez, executive vice president of JP MorganChase and former U.S. Senator (R/FL) and Secretary of Housing and Urban Development ; William D. Novelli. Professor in Practice at Georgetown University's McDonough School of Business, former CEO of AARP, and co-founder and former president of Porter Novelli; Andrew L. Stern, Senior Research Fellow at Georgetown University's Public Policy Institute, and former President of the Service Employees International Union (SEIU); Paula Van Ness, Consultant, and former CEO of the Starlight Children's Foundation and the Make-A-Wish Foundations; Joshua S. Weston, Director, and Former CEO of Automatic Data Processing (ADP), Rev. Jim Wallis, CEO and editor of the Sojourners and Walker, of the Comeback America and former U.S. comptroller general and CEO of the U.S. Government Accountability Office (GAO).

Friedman didn't mention it in his column about Walkerbut he has spoken before of the existence of AmericansElect, a group founded and funded by Wall Streetheavies who are using the internet to secure a thirdparty spot on the ballot in case things don't turn outas they wish in the Presidential primaries.

"If anything, Americans Elect and David Walkerepitomize all that's wrong with American democracy.Americans Elect is the creature of multi-millionairesand billionaires, who now have the ability to spendinfinite money putting their thumbs on the scales ofAmerican democracy thanks to the Supreme Court'sCitizens United decision," wrote Robert Kuttner, co-editor of American Prospect magazine. "Walker himselfenjoys his enlarged megaphone thanks to the billiondollars that retired private equity mogul Pete Petersonput into the austerity crusade."

The conservative online magazine American Thinker notedthis week that "Though Americans Elect is succeeding atthe moment in concealing the identities of its donors,its seed money man and chairman (whatever that scarytitle means in the context of an American politicalparty) is known: Peter Ackerman kicked off the groupwith a $5,000,000 contribution. Ackerman (b. 1946) wasa key Wall Street sidekick to 1980s junk bond king andnearly two-year compulsory guest of the federalgovernment, Michael Milkin. Ackerman's wealth is notknown to the dime, but the number surely runs to ninefigures, maybe ten. And, most importantly for figuringout what Americans Elect is all about, Ackerman was anObama supporter in 2008."

In 2007, while still in government service, Walker wasdrawing parallels between the U.S. and the fall of theRoman Empire, warning that there were "strikingsimilarities," including "declining moral values andpolitical civility at home, an over-confident and over-extended military in foreign lands and fiscalirresponsibility by the central government." Thecountry's leading auditor evidently missed the thenlooming storm of the current economic crisis.

"The real problem facing the country was the housingbubble, which was growing ever larger," economist Bakerwrote last week. "Unfortunately, people like DavidWalker and his merry band of deficit hawks, financed bythe likes of Peter Peterson, sucked up much of theoxygen for coverage of economic issues. There were manynews shows and stories devoted to their apocalypticwarnings of budget doom. There was no time to wastetalking to people yelling about things like an $8trillion housing bubble.

"Of course one of the ironies of this story is that thebursting of the housing bubble led to an economiccollapse which resulted in much bigger deficits thananything that Walker and his crew ever warned about. Oneof the other ironies is that being completely wrongabout the nature of the problems facing the economy doesnot seem to have affected Walker's standing in publicdebates one iota, at least it sure hasn't in ThomasFriedman's world."

"After months of nutty, gravity-free Republican primarydebates, how great would it be to have presidentialdebates in which a smart independent like Walker was inthe middle to challenge both sides and offer sensiblesolutions," wrote Friedman.

And Now, the Catfood Party (2)

Like most establishment pundits, Thomas Friedman (andapparently most of the rest of the nation) came awayfrom the awful reality show called the RepublicanPresidential debates quite discouraged. While someprominent conservatives in the party are openly castingabout for a way to inject some sanity into the race andperhaps another candidate the New York Times columnistis talking up another party. "Eventually the `circularfiring squad' that is the Republican primary will beover and the last man standing will be the party'snominee for president," wrote the scribe of flat earthfame. "If that candidate is Rick Santorum, I thinkthere is a good chance a Third Party will try to fillthe space between the really `severely conservative'Santorum (or even Mitt Romney) and the left-of-centerBarack Obama." (Notice how he puts the unnamed party incapital letters, probably to set it off from thealready existing alternatives, like the Green Party, orSocialist Party.)

Friedman says he hasn't made up his mind whether hewould support an alternative candidacy but he has anominee to head its ticket. It's former U.S.comptroller general David Walker, a former seniorexecutive at PWC auditing firm and currently the chiefexecutive of something called the "Comeback AmericaInitiative." Walker's background and activities areinteresting and instructive, but of most significanceis what it is that he proposes to do to get "America'sfiscal house in order."

What's the big problem? The deficit, which "is primarily a spending problem" but "not only a spending problem."

One dollar in new revenue is needed for every $3 in spending cuts, excluding interest, says Walker - andthat should be accomplished through tax "reform" thatmakes our system "simpler, fairer and more competitive,while generating more revenue," Friedman quotes himapprovingly. "The Republicans are simply in denialabout this," says Walker.

Meanwhile, the Democrats "are still in denial about theneed to renegotiate our social insurance contract,"says Walker. He complains the President Obama "is nottalking about the fundamental reforms in Medicare andMedicaid that we need, and he is not ready to touchSocial Security."

In 2008, Walker wrote, "We need to re-impose toughbudget controls, constrain federal spending, decidewhich Bush tax cuts will stay, and engage incomprehensive reform of our entitlement, healthcare andtax systems. A bipartisan commission that would makerecommendations for an up-or-down vote by Congresswould be a positive step to making this a reality."

When the President was convinced in 2010 to set up the"bipartisan" National Commission on FiscalResponsibility and Reform - otherwise known of as the"Simpson Bowles" panel - the chief potential targetsfor spending cuts were Social Security, Medicare andMedicaid, the three principal economic securityprograms for seniors, people with disabilities and thevery poor. As the intent became clear, Senior anddisability activists around the country took toreferring to it as the "Catfood Commission," anallusion to the really existing seniors who haveresorted to eating pet food when their meager incomeshave run out.

First we had the catfood commission; now we have thecatfood party.

Some on the Left have taken to saying the U.S. hasbecome a "Third World" country. Sound catchy, but it'sway off the mark. If the country were reallyimpoverished, there would be some legitimacy to theidea that we really couldn't afford to properly meetthe needs the elderly, people with disabilities and thepoor. Yet, ours remains the richest, most powerfulnation on the planet, one that spends trillions ofdollars on foreign wars and maintains an upper crustthat consumes voratiously and ostentatiously. It's all amatter of equities and priorities.

Walker correctly notes that "We are not Greece, wherethe government grew too big, promised too much andwaited too long to restructure," adding "but we'remaking many of the same mistakes."

And we're getting the same advice from the same people.

The creation of the deficit commission coincided with acall by the International Monetary Fund (IMF) to reducethe U.S. federal budget by reforming Social Security.

"Since benefits can be fully funded for almost threedecades by the bonds held in the trust fund, the IMF iseffectively suggesting that the government default onthese bonds and not give workers the benefits that theyalready paid for with their Social Security taxes,"economist Dean Baker wrote at the time.

"It is a bit striking to see a recommendation like thisfrom the IMF for two reasons," wrote Baker of theCenter for Economic and Policy Research, July 9, 2010."First, the only reason that the country is facing sucha large deficit and debt is that economists at the IMFand elsewhere were not able to see the $8 trillionhousing bubble. It was the collapse of this housingbubble that wrecked the economy and caused the deficitto skyrocket. In other words, the IMF wants U.S.retirees to take a hit because the economists who workat the IMF and other such places do not know how to dotheir jobs."

"The other reason why this suggestion from the IMF isstriking is that the economists there can often retireewith huge pensions in their early 50s. It not uncommonfor a former IMF staffer to be able to be getting asix-figure pension when they are just 51 or 52,"continued Baker. "So we have the people who wreckeconomies drawing $100,000 pensions at age 51,complaining about the $14,000 a year in Social Securitybenefits that real workers begin drawing in theirsixties. Excuse me for not taking this one seriously."

But it was taken seriously, very seriously.

For two years now, the litany has become all toofamiliar. Major media editorialists and economicwriters constantly refer to Social Security andMedicare as "the two long term drivers of the budgetdeficit," as the Financial Times did last week.Actually, Social Security has never contributed to thebudget shortfall and the problem with Medicare is thecontinuing skyrocketing cost of medical care.

Heavily funded Political Action Committees are not theonly way representatives of the very wealthy throwtheir weight around in the political arena. There isPeter G. Peterson, former U.S. Secretary of Commerceand co-founder of the Blackstone Group - an American-based financial-services company, who set up the groupbearing his name. Less than three months after the IMFcall for action on Social Security, Walker took leaveas president and CEO of the Peter G. PetersonFoundation and assumed leadership of the new heavilyendowed Comeback America as a vehicle "to engageAmericans and assist key policymakers in makinggovernment more future-focused, results-oriented,responsive, efficient, equitable and sustainable."

More from carl bloice And Now, the Catfood PartyThePeterson group was launched with a grant of $1 billion.Its board of directors includes:

J. Michael Cook (chair), Independent Director, former Managing Partner and CEO of Deloitte Worldwide, and former chair of the American Institute of CPAs. (AICPA); Ernest A. Almonte, CEO of Almonte Group LLC, former chair of the AICPA, and former auditor general of Rhode Island; Norman R. Augustine, independent director, and former chair and CEO of Lockheed Martin Corporation; Michael J. Critelli, independent director, and former Chairman and CEO of Pitney Bowes; Harold E. Ford, Jr.; executive vice chair of Bank of America/Merrill Lynch, and Former Congressmember (D/TN); Mel R. Martinez, executive vice president of JP MorganChase and former U.S. Senator (R/FL) and Secretary of Housing and Urban Development ; William D. Novelli. Professor in Practice at Georgetown University's McDonough School of Business, former CEO of AARP, and co-founder and former president of Porter Novelli; Andrew L. Stern, Senior Research Fellow at Georgetown University's Public Policy Institute, and former President of the Service Employees International Union (SEIU); Paula Van Ness, Consultant, and former CEO of the Starlight Children's Foundation and the Make-A-Wish Foundations; Joshua S. Weston, Director, and Former CEO of Automatic Data Processing (ADP), Rev. Jim Wallis, CEO and editor of the Sojourners and Walker, of the Comeback America and former U.S. comptroller general and CEO of the U.S. Government Accountability Office (GAO).

Friedman didn't mention it in his column about Walkerbut he has spoken before of the existence of AmericansElect, a group founded and funded by Wall Streetheavies who are using the internet to secure a thirdparty spot on the ballot in case things don't turn outas they wish in the Presidential primaries.

"If anything, Americans Elect and David Walkerepitomize all that's wrong with American democracy.Americans Elect is the creature of multi-millionairesand billionaires, who now have the ability to spendinfinite money putting their thumbs on the scales ofAmerican democracy thanks to the Supreme Court'sCitizens United decision," wrote Robert Kuttner, co-editor of American Prospect magazine. "Walker himselfenjoys his enlarged megaphone thanks to the billiondollars that retired private equity mogul Pete Petersonput into the austerity crusade."

The conservative online magazine American Thinker notedthis week that "Though Americans Elect is succeeding atthe moment in concealing the identities of its donors,its seed money man and chairman (whatever that scarytitle means in the context of an American politicalparty) is known: Peter Ackerman kicked off the groupwith a $5,000,000 contribution. Ackerman (b. 1946) wasa key Wall Street sidekick to 1980s junk bond king andnearly two-year compulsory guest of the federalgovernment, Michael Milkin. Ackerman's wealth is notknown to the dime, but the number surely runs to ninefigures, maybe ten. And, most importantly for figuringout what Americans Elect is all about, Ackerman was anObama supporter in 2008."

In 2007, while still in government service, Walker wasdrawing parallels between the U.S. and the fall of theRoman Empire, warning that there were "strikingsimilarities," including "declining moral values andpolitical civility at home, an over-confident and over-extended military in foreign lands and fiscalirresponsibility by the central government." Thecountry's leading auditor evidently missed the thenlooming storm of the current economic crisis.

"The real problem facing the country was the housingbubble, which was growing ever larger," economist Bakerwrote last week. "Unfortunately, people like DavidWalker and his merry band of deficit hawks, financed bythe likes of Peter Peterson, sucked up much of theoxygen for coverage of economic issues. There were manynews shows and stories devoted to their apocalypticwarnings of budget doom. There was no time to wastetalking to people yelling about things like an $8trillion housing bubble.

"Of course one of the ironies of this story is that thebursting of the housing bubble led to an economiccollapse which resulted in much bigger deficits thananything that Walker and his crew ever warned about. Oneof the other ironies is that being completely wrongabout the nature of the problems facing the economy doesnot seem to have affected Walker's standing in publicdebates one iota, at least it sure hasn't in ThomasFriedman's world."

"After months of nutty, gravity-free Republican primarydebates, how great would it be to have presidentialdebates in which a smart independent like Walker was inthe middle to challenge both sides and offer sensiblesolutions," wrote Friedman.